|
|
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the fiscal year ended May 31, 2018
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
For the transition period from to
|
|
Delaware
|
|
11-3146460
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
|
|
|
14 Plaza Drive Latham, New York
|
|
12110
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Title of each class
|
|
Name of each exchange on which registered
|
Common Stock, par value $.01 per share
|
|
NASDAQ Global Select Market
|
|
|
|
|
|
Large accelerated filer
¨
|
|
Accelerated filer
x
|
|
Non-accelerated filer
¨
|
|
Smaller reporting company
¨
|
|
Emerging growth company
¨
|
|
|
|
|
Page
|
Part I:
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
Part II:
|
|
|
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
Part III:
|
|
|
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
Part IV:
|
|
|
Item 15.
|
Item 1.
|
Business.
|
•
|
Soft-Vu flush catheters are available in flush and selective varieties. Flush Catheters are used in procedures where a high flow of contrast is required for “big picture” diagnostics. Anomalies discovered through a flush angiogram may require further investigation into a vessel of interest. Soft-Vu selective catheters are used to gain access to smaller or more distal vessels and advance the catheter or wire into the diseased section.
|
•
|
Accu-Vu sizing catheters feature radiopaque marker bands at the distal (farthest away) portion of the catheter to provide a highly accurate measurement of the patient’s anatomy. This enables precise measurement for interventional devices (stents, filters, etc.)
|
•
|
AngiOptic catheters have total catheter radiopacity, ensuring tip-to-hub visibility. This catheter is also constructed with a firm tip material that enhances stability during high-flow injections, providing excellent pushability.
|
•
|
Mariner catheters have a hydrophilic coating that, when combined with water, reduces friction. This makes insertion potentially easier and more comfortable for the patient, and can also be used for advancing through tortuous anatomy.
|
•
|
BioFlo
®
PICC
: Our BioFlo line is the only power injectable PICC available that incorporates Endexo Technology into the manufacturing and design of the catheter. Advanced features such as large lumen diameters allow the BioFlo
®
PICC to deliver the power injection flow rates required for contrast-enhanced Computed Tomography (CT) scans compatible with up to 325 psi CT injections.
|
•
|
BioFlo
®
Midline:
The BioFlo Midline Catheter is an effective solution to preserving a patient’s peripheral access. It provides a cost-effective alternative to multiple IV site rotations for patients who need short-term venous access.
|
•
|
Xcela PICC
: The Xcela
®
PICC line is designed to provide a high degree of safety, ease and confidence in patient care. Advanced features such as large lumen diameters allow the Xcela
®
PICC to deliver the power injection flow rates required for contrast-enhanced CTs compatible with up to 325 psi CT injections.
|
•
|
PASV
®
Valve Technology:
The PASV
®
Valve Technology is available in both BioFlo and Xcela lines and is designed to automatically resist backflow and reduce blood reflux that could lead to catheter-related complications.
|
•
|
BioFlo
®
Port
: Our BioFlo Port is the only port available that features a catheter with Endexo Technology. Advanced features of the BioFlo Port include multiple profile and catheter options, a large septum area for ease of access and the ability to administer contrast through a CT injection for purposes of imaging.
|
•
|
SmartPort
®
: The Smart Port power-injectable port with Vortex technology offers the ability for a clinician to access a vein for both the delivery of medications or fluids and for administering power-injected contrast to perform a (CT) scan. The ability to access a port for power-injected contrast studies eliminates the need for additional needle sticks in the patient’s arm and wrist veins. Once implanted, repeated access to the bloodstream can be accomplished with greater ease and less discomfort. Our Smart Port is available in mini and low-profiles to accommodate more patient anatomies.
|
•
|
Vortex
®
:
Our Vortex port technology line of ports is a clear-flow port technology that, we believe, revolutionized port design. With its rounded chamber, the Vortex port is designed to have no sludge-harboring corners or dead spaces. This product line consists of titanium, plastic and dual-lumen offerings.
|
•
|
PASV
®
Valve Technology:
The PASV
®
Valve Technology is designed to automatically resist backflow and reduce blood reflux that could lead to catheter-related complications.
|
•
|
LifeGuard
®
:
The LifeGuard Safety Infusion Set and The LifeGuard Vision are used to infuse our ports and complement our port and vascular access catheters. The needles’ low profile design is intended to allow clinicians to easily dress the site.
|
•
|
BioFlo
®
DuraMax
: Our BioFlo DuraMax is the only dialysis catheter with Endexo Technology. Advanced features of the BioFlo DuraMax dialysis catheter include large inner diameter lumens designed for long term patency, a proprietary guidewire lumen to facilitate catheter exchanges and Curved Tip Technology that allows the catheter to self-center in the Superior Vena Cava (SVC).
|
•
|
DuraMax
®
:
The DuraMax catheter is a stepped-tip catheter designed to improve ease of use, dialysis efficiency and overall patient outcomes.
|
Name
|
|
Age
|
|
Position
|
James C. Clemmer
|
|
54
|
|
President and Chief Executive Officer
|
Michael C. Greiner
|
|
45
|
|
Executive Vice President and Chief Financial Officer
|
Stephen A. Trowbridge
|
|
44
|
|
Senior Vice President and General Counsel
|
David D. Helsel
|
|
54
|
|
Senior Vice President Global Operations
|
Warren G. Nighan
|
|
49
|
|
Senior Vice President Quality & Regulatory Affairs
|
Heather J. Daniels-Cariveau
|
|
44
|
|
Senior Vice President Human Resources
|
Benjamin H. Davis
|
|
53
|
|
Senior Vice President Business Development
|
Chad T. Campbell
|
|
47
|
|
Senior Vice President and General Manager, Vascular Access
|
Brent J. Boucher
|
|
51
|
|
Senior Vice President and General Manager, Oncology/Surgery
|
Robert A. Simpson
|
|
46
|
|
Senior Vice President and General Manager, Peripheral Vascular
|
Kim L. Seabury
|
|
51
|
|
Senior Vice President, Information Technology
|
Item 1A.
|
Risk Factors.
|
•
|
financial and other resources to devote to product acquisitions, research and development, marketing and manufacturing;
|
•
|
variety of products;
|
•
|
technical capabilities;
|
•
|
history of developing and introducing new products;
|
•
|
patent portfolios that may present an obstacle to our conduct of business;
|
•
|
name recognition; and
|
•
|
distribution networks and in-house sales forces.
|
•
|
recruit engineers;
|
•
|
timely and accurately identify new market trends;
|
•
|
accurately assess customer needs;
|
•
|
minimize the time and costs required to obtain regulatory clearance or approval;
|
•
|
adopt competitive pricing;
|
•
|
timely manufacture and deliver products;
|
•
|
accurately predict and control costs associated with the development, manufacturing and support of our products; and
|
•
|
anticipate and compete effectively with our competitors’ efforts.
|
•
|
potential disruption of our business while we evaluate opportunities, complete acquisitions and develop and implement new business strategies to take advantage of these opportunities;
|
•
|
inability of our management to maximize our financial and strategic position by incorporating an acquired technology or business into our existing offerings;
|
•
|
our inability to achieve the cost savings and operating synergies anticipated in the acquisition, which would prevent us from achieving the positive earnings gains expected as a result of the acquisition;
|
•
|
diversion of management attention from ongoing business concerns to integration matters;
|
•
|
difficulty of maintaining uniform standards, controls, procedures and policies;
|
•
|
challenges in demonstrating to our customers that the acquisition will not result in adverse changes in customer service standards or business focus;
|
•
|
possible cash flow interruption or loss of revenue as a result of change of ownership transition matters;
|
•
|
difficulty of assimilating the operations and personnel of acquired businesses;
|
•
|
potential loss of key employees of acquired businesses, and the impairment of relationships with employees and customers as a result of changes in management; and
|
•
|
uncertainty as to the long-term success of any acquisitions we may make including the impact on contingent liabilities.
|
•
|
fluctuations in currency exchange rates;
|
•
|
healthcare reform legislation;
|
•
|
multiple non-U.S. regulatory requirement that are subject to change and could restrict our ability to manufacture and sell our products;
|
•
|
local product preferences and product requirements;
|
•
|
longer-term receivables than are typical in the U.S.;
|
•
|
trade protection measures and import or export licensing requirements;
|
•
|
less intellectual property protection in some countries outside the U.S. than exists in the U.S.;
|
•
|
different labor regulations and workforce instability;
|
•
|
political instability;
|
•
|
the potential payment of U.S. income taxes on earnings of certain foreign subsidiaries subject to U.S. taxation upon repatriation;
|
•
|
the expiration and non-renewal of foreign tax rulings;
|
•
|
potential negative consequences from changes in or interpretation of tax laws; and
|
•
|
economic instability and inflation, recession or interest rate fluctuations.
|
•
|
our board of directors is authorized, without prior stockholder approval, to create and issue “blank check” preferred stock, with rights senior to those of our common stock;
|
•
|
our board of directors is classified so that not all members of our board of directors are elected at one time, which may make it more difficult for a person who acquires control of a majority of our outstanding voting stock to replace our directors;
|
•
|
advance notice requirements for stockholders to nominate individuals to serve on our board of directors or for stockholders to submit proposals that can be acted upon at stockholder meetings;
|
•
|
stockholder action by written consent is prohibited; and
|
•
|
stockholders are not permitted to cumulatively vote for the election of directors.
|
•
|
controls on government-funded reimbursement for healthcare services and price controls on medical products and services providers;
|
•
|
challenges to the pricing of medical procedures or limits or prohibitions on reimbursement for specific devices and therapies through other means; and
|
•
|
the introduction of managed care systems in which healthcare providers contract to provide comprehensive healthcare for a fixed cost per person.
|
•
|
the level of sales of our products and services in our markets;
|
•
|
our ability to introduce new products or services and enhancements in a timely manner;
|
•
|
the demand for and acceptance of our products and services;
|
•
|
the success of our competition and the introduction of alternative products or services;
|
•
|
our ability to command favorable pricing for our products and services;
|
•
|
the growth of the market for our devices and services;
|
•
|
the expansion and rate of success of our direct sales force in the United States and internationally and our independent distributors internationally;
|
•
|
actions relating to ongoing FDA compliance;
|
•
|
the effect of intellectual property disputes;
|
•
|
the size and timing of orders from independent distributors or customers;
|
•
|
the attraction and retention of key personnel, particularly in sales and marketing, regulatory, manufacturing and research and development;
|
•
|
unanticipated delays or an inability to control costs;
|
•
|
general economic conditions as well as those specific to our customers and markets; and
|
•
|
seasonal fluctuations in revenue due to the elective nature of some procedures.
|
•
|
general economic, industry and market conditions;
|
•
|
actions by institutional or other large stockholders;
|
•
|
the depth and liquidity of the market for our common stock;
|
•
|
volume and timing of orders for our products;
|
•
|
developments generally affecting medical device companies;
|
•
|
the announcement of new products or product enhancements by us or our competitors;
|
•
|
changes in earnings estimates or recommendations by securities analysts;
|
•
|
investor perceptions of us and our business, including changes in market valuations of medical device companies; and
|
•
|
our results of operations and financial performance.
|
Item 1B.
|
Unresolved Staff Comments.
|
Item 2.
|
Properties.
|
Location
|
Purpose
|
|
Approx.
Sq. Ft.
|
|
Property
Type
|
|
Latham, NY
|
Corporate headquarters
|
|
55,000
|
|
|
Leased
|
Glens Falls, NY
|
Manufacturing
|
|
189,000
|
|
|
Owned
|
Queensbury, NY
|
Manufacturing and distribution
|
|
129,000
|
|
|
Owned
|
Manchester, GA
*
|
Manufacturing and distribution
|
|
60,000
|
|
|
Leased
|
Marlborough, MA
|
Research & Development
|
|
31,000
|
|
|
Leased
|
Denmead, U.K.
*
|
Manufacturing
|
|
7,500
|
|
|
Leased
|
Amsterdam, NL
|
Selling, Marketing & Administrative
|
|
8,100
|
|
|
Leased
|
Item 3.
|
Legal Proceedings.
|
Item 4.
|
Mine Safety Disclosures.
|
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities.
|
Item 6.
|
Selected Financial Data.
|
|
Year ended May 31,
|
||||||||||||||||||
(in thousands, except per share information)
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Consolidated Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
344,285
|
|
|
$
|
349,643
|
|
|
$
|
353,890
|
|
|
$
|
356,534
|
|
|
$
|
354,425
|
|
Gross profit (exclusive of intangible amortization)
|
176,875
|
|
|
176,169
|
|
|
174,316
|
|
|
175,796
|
|
|
180,174
|
|
|||||
Operating expenses
|
|
|
|
|
|
|
|
|
|
||||||||||
Research and development
|
25,459
|
|
|
25,269
|
|
|
25,053
|
|
|
26,594
|
|
|
28,124
|
|
|||||
Sales and marketing
|
77,276
|
|
|
78,819
|
|
|
83,743
|
|
|
82,351
|
|
|
85,696
|
|
|||||
General and administrative
|
31,265
|
|
|
31,406
|
|
|
30,583
|
|
|
30,031
|
|
|
26,511
|
|
|||||
Amortization of intangibles
|
16,635
|
|
|
17,296
|
|
|
17,964
|
|
|
17,966
|
|
|
16,562
|
|
|||||
Change in fair value of contingent consideration
|
250
|
|
|
(15,261
|
)
|
|
948
|
|
|
(8,096
|
)
|
|
(1,908
|
)
|
|||||
Acquisition, restructuring and other items, net (a)
|
15,432
|
|
|
27,510
|
|
|
12,591
|
|
|
26,257
|
|
|
10,873
|
|
|||||
Medical device excise tax
|
—
|
|
|
(1,837
|
)
|
|
2,416
|
|
|
4,142
|
|
|
3,829
|
|
|||||
Total operating expenses
|
166,317
|
|
|
163,202
|
|
|
173,298
|
|
|
179,245
|
|
|
169,687
|
|
|||||
Operating income (loss)
|
10,558
|
|
|
12,967
|
|
|
1,018
|
|
|
(3,449
|
)
|
|
10,487
|
|
|||||
Total other (expenses), net
|
(3,093
|
)
|
|
(3,120
|
)
|
|
(4,271
|
)
|
|
(4,682
|
)
|
|
(5,301
|
)
|
|||||
Net income (loss)
|
$
|
16,335
|
|
|
$
|
5,008
|
|
|
$
|
(43,590
|
)
|
|
$
|
(3,388
|
)
|
|
$
|
2,347
|
|
Earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
0.44
|
|
|
$
|
0.14
|
|
|
$
|
(1.21
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
0.07
|
|
Diluted
|
$
|
0.44
|
|
|
$
|
0.14
|
|
|
$
|
(1.21
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
0.07
|
|
(a)
|
Acquisition, restructuring and one-time items include restructuring expenses or expenses incurred as part of M&A, product discontinuance, legal settlements and legal costs that are related to litigation that is not in the ordinary course of business.
|
|
As of May 31,
|
||||||||||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and marketable securities
|
$
|
75,413
|
|
|
$
|
48,759
|
|
|
$
|
33,986
|
|
|
$
|
20,080
|
|
|
$
|
17,914
|
|
Working capital
|
110,731
|
|
|
82,398
|
|
|
79,527
|
|
|
90,283
|
|
|
81,071
|
|
|||||
Total assets
|
705,472
|
|
|
707,961
|
|
|
726,194
|
|
|
773,058
|
|
|
798,576
|
|
|||||
Long-term debt, including current portion
|
91,621
|
|
|
96,320
|
|
|
120,541
|
|
|
137,660
|
|
|
142,660
|
|
|||||
Contingent consideration
|
3,261
|
|
|
12,761
|
|
|
38,275
|
|
|
47,384
|
|
|
67,231
|
|
|||||
Total long-term liabilities
|
105,576
|
|
|
121,418
|
|
|
152,239
|
|
|
167,444
|
|
|
195,750
|
|
|||||
Total stockholders’ equity
|
542,595
|
|
|
515,027
|
|
|
507,228
|
|
|
545,099
|
|
|
536,885
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Conditions and Results of Operations.
|
•
|
Revenue
decreased
by
1.5%
to
$344.3 million
|
•
|
Gross margin as a percentage of sales
increased
by 100 bps to
51.4%
|
•
|
Operating income
decreased
by
$2.4 million
to
$10.6 million
|
•
|
Earnings per share
increased
by
$0.30
to
$0.44
|
•
|
Cash flow from operations
decreased
by
$14.5 million
to
$41.3 million
|
•
|
Operational Consolidation
. The Company announced a planned consolidation of operations from the Manchester, GA and Denmead, UK facilities into the Glens Falls and Queensbury, NY manufacturing facilities in the third quarter of fiscal year 2017. The consolidation was completed during fiscal year 2018 and resulted in streamlined operations, reduced costs, optimized inventory management and gross margin improvement. As part of the plan, the Company incurred restructuring expenses, including severance and retention, equipment transfer, set-up and purchases, regulatory expenses, lease termination expenses and other miscellaneous expenses.
|
•
|
Product development process.
The Company continued its robust product development process which is intended to improve the Company’s ability to bring new products to market.
|
•
|
New members of the executive leadership team
. President and Chief Executive Officer James C. Clemmer continued to welcome new members to the AngioDynamics leadership team, including Brent Boucher, Senior Vice President and General Manager of Oncology/Surgery Global Business Unit and David Helsel, Senior Vice President Global Operations.
|
•
|
Value Creation.
To create value, the Company plans to practice dispassionate portfolio optimization and continue to focus on areas of compelling unmet needs including those that are patient-centric and evidenced-based. This is evident through the updated GBU's effective June 1, 2018 which will allow for call point expansion and sales force realignment. In addition, the Company is pursuing targeted global expansion opportunities.
|
|
Year ended May 31,
|
||||||||
(in thousands)
|
2018
|
|
2017
|
|
% Growth
|
||||
Net Sales by Product Category
|
|
|
|
|
|
||||
Peripheral Vascular
|
$
|
202,334
|
|
|
$
|
208,602
|
|
|
(3)%
|
Vascular Access
|
92,760
|
|
|
96,481
|
|
|
(4)%
|
||
Oncology/Surgery
|
49,191
|
|
|
44,560
|
|
|
10%
|
||
Total
|
$
|
344,285
|
|
|
$
|
349,643
|
|
|
(2)%
|
|
|
|
|
|
|
||||
Net Sales by Geography
|
|
|
|
|
|
||||
United States
|
$
|
273,327
|
|
|
$
|
282,168
|
|
|
(3)%
|
International
|
70,958
|
|
|
67,475
|
|
|
5%
|
||
Total
|
$
|
344,285
|
|
|
$
|
349,643
|
|
|
(2)%
|
•
|
Consolidated and U.S. net sales decreased from the prior year as a result of decreased net sales from Peripheral Vascular and Vascular Access. This decrease was partially offset by 10% year over year growth in our Oncology/Surgery GBU.
|
•
|
Total Peripheral Vascular sales decreased
$6.3 million
primarily attributable to decreased sales volume of Venous by $9.3 million and Angiographic and Core products of $1.6 million. The decrease in Venous is primarily attributed to our largest customer discontinuing their exclusive use of our EVLT product. This decreased sales volume was offset by an increase of volume in Fluid Management of $4.0 million and AngioVac of $0.9 million. The increase in Fluid Management was attributed to the Fluid Management dedicated sales team being fully staffed and promoting new custom kits along with targeted R&D investments.
|
•
|
U.S. Peripheral Vascular sales decreased $5.6 million primarily due to decreased sales volume of Venous of $9.1 million and Angiographic and Core products of $0.9 million. This decreased sales volume was offset by an increase in volume in Fluid Management of $3.5 million and AngioVac of $1.0 million.
|
•
|
International Peripheral Vascular sales decreased $0.7 million.
|
•
|
Total Vascular Access sales decreased
$3.7 million
primarily in our non-BioFlo businesses. Our BioFlo product lines, other than BioFlo PICCs, increased $2.4 million. This was partially offset by decreased sales of BioFlo PICCs of $2.5 million and non-BioFlo products of $3.1 million. BioFlo product lines comprise 49% of our overall Vascular Access sales, compared to 47% a year ago.
|
•
|
U.S. Vascular Access sales declined by $3.8 million due to softness across the portfolio offset by Midline, BioFlo dialysis and ports which continued to gain traction in the marketplace.
|
•
|
International Vascular Access sales increased $0.1 million.
|
•
|
Total Oncology/Surgery sales increased
$4.6 million
year over year primarily due to increased sales of the Solero Microwave generators of $1.3 million, Solero Microwave probes of $6.4 million and other sales of $0.7 million. Solero Microwave was approved in the first quarter of fiscal year 2018. This was partially offset by decreased Radiofrequency Ablation sales of $3.4 million and Nanoknife disposable sales of $0.6 million. The decrease in Radiofrequency Ablation sales was primarily due to the discontinuation of the product in Japan.
|
•
|
U.S. Oncology/Surgery increased by $0.6 million, driven primarily through increased Microwave sales of $3.4 million. This increase was partially offset by decreases in Radiofrequency Ablation of $1.7 million and NanoKnife of $1.4 million.
|
•
|
International Oncology/Surgery sales increased $4.0 million year over year as a result of increased NanoKnife capital and disposable sales of $1.1 million and Solero Microwave capital and disposable sales of $4.3 million. This increase was partially offset by a $1.7 million decrease in RadioFrequency Ablation.
|
|
|
Year ended May 31,
|
|||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
% Change
|
|||||
Gross profit (exclusive of intangible amortization)
|
|
$
|
176,875
|
|
|
$
|
176,169
|
|
|
0.4
|
%
|
Gross profit % of sales
|
|
51.4
|
%
|
|
50.4
|
%
|
|
|
|||
Research and development
|
|
$
|
25,459
|
|
|
$
|
25,269
|
|
|
0.8
|
%
|
% of sales
|
|
7.4
|
%
|
|
7.2
|
%
|
|
|
|||
Selling and marketing
|
|
$
|
77,276
|
|
|
$
|
78,819
|
|
|
(2.0
|
)%
|
% of sales
|
|
22.4
|
%
|
|
22.5
|
%
|
|
|
|||
General and administrative
|
|
$
|
31,265
|
|
|
$
|
31,406
|
|
|
(0.4
|
)%
|
% of sales
|
|
9.1
|
%
|
|
9.0
|
%
|
|
|
•
|
The expiration of a royalty agreement of approximately $4.8 million, net productivity of $1.7 million, $0.9 million of mix and FX of $0.8 million were partially offset by volume softness and pricing headwinds of approximately $4.8 million.
|
•
|
$2.3 million in deferred revenue was recognized in fiscal year 2018 related to the Acculis probe recall announced in the fourth quarter of fiscal year 2017 which was partially offset by additional expense of $3.2 million that was incurred as a result of the market withdrawal of Microwave generators.
|
•
|
In the second quarter of fiscal year 2018, the Company decided to discontinue selling our RadioFrequency Ablation product in Japan which resulted in a $1.7 million inventory provision.
|
•
|
Increased headcount in the R&D department compared to the prior year resulted in $0.6 million in additional expense. These increases were partially offset by less project spend of $0.4 million.
|
•
|
Compensation and benefits decrease of approximately $2.7 million was primarily the result of decreased variable compensation of $2.3 million and open headcount of $0.5 million.
|
•
|
Open headcount resulted in increased travel of $0.5 million and recruiting expense of $0.3 million.
|
•
|
Lower consulting spend of $0.7 million was partially offset by increased trade show and meeting expense of $0.5 million and increased samples expense related to the Solero launch of $0.2 million.
|
•
|
Compensation and benefits increase of approximately $1.9 million was primarily the result of increased headcount year over year which was partially offset by a decrease in variable compensation expense of $0.5 million.
|
•
|
These increases were offset by lower depreciation expense of $0.8 million, a decrease in bad debt expense of $0.3 million and a decrease in recruiting expenses of $0.4 million.
|
|
|
Year ended May 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
$ Change
|
||||||
Amortization of intangibles
|
|
$
|
16,635
|
|
|
$
|
17,296
|
|
|
$
|
(661
|
)
|
Change in fair value of contingent consideration
|
|
$
|
250
|
|
|
$
|
(15,261
|
)
|
|
$
|
15,511
|
|
Acquisition, restructuring and other items, net
|
|
$
|
15,432
|
|
|
$
|
27,510
|
|
|
$
|
(12,078
|
)
|
Medical device excise tax
|
|
$
|
—
|
|
|
$
|
(1,837
|
)
|
|
$
|
1,837
|
|
Other expense
|
|
$
|
(3,093
|
)
|
|
$
|
(3,120
|
)
|
|
$
|
27
|
|
•
|
The decrease of $0.7 million is primarily related to intangible assets that became fully amortized in the prior year.
|
•
|
In the prior year, a gain of $13.4 million was taken on the AngioVac product as a result of decreases in future sales projections that eliminated any payments above minimums and a gain of $3.1 million on the TiLo product as the milestone was determined to not be achieved. The normal amortization of the present value discount on the contingent liabilities was approximately $0.1 million for the first two quarters of fiscal year 2018. For the last two quarters of fiscal year 2018, amortization is now less than $0.1 million per quarter as the final minimum payment was made on AngioVac in the second quarter of fiscal year 2018.
|
•
|
In the current year there was $4.7 million of expense related to the plant consolidation that was announced in the third quarter of fiscal year 2017. The expense consisted mainly of severance of $1.4 million, costs to move the product lines including equipment transfer expenses, accelerated depreciation for assets that will not be transferred, product validation and other start-up costs of $2.9 million and $0.2 million in contract termination expenses.
|
•
|
In the prior year, there was $1.3 million of expense related to the plant consolidation that was announced in the third quarter of fiscal year 2017. The expense consisted of severance of $0.8 million and start-up costs to move the product lines including equipment transfer expenses and accelerated depreciation for assets that will not be transferred of $0.5 million.
|
•
|
In the prior year there was a $2.0 million write-off of Embomedics due to termination of the agreement and a $3.6 million write-off related to the decision to discontinue our investment in the TiLo product.
|
•
|
A litigation settlement accrual of $12.5 million was recorded in the fourth quarter of fiscal year 2017 for the agreement that was reached with the DOJ.
|
•
|
Legal expenses, related to litigation that is outside of the normal course of business, of $10.1 million were recorded in the current year compared to $7.0 million in the prior year.
|
•
|
The Medical Device Excise Tax was suspended on January 1, 2016 and the suspension was upheld in January 2018. In the prior year, there was a $1.8 million refund from the Internal Revenue Service related to prior medical device taxes paid.
|
|
|
For year ended May 31,
|
||||||
(in thousands)
|
|
2018
|
|
2017
|
||||
Income tax expense (benefit)
|
|
$
|
(8,870
|
)
|
|
$
|
4,839
|
|
Effective tax rate including discrete items
|
|
(119
|
)%
|
|
49
|
%
|
|
Year ended May 31,
|
||||||||
(in thousands)
|
2017
|
|
2016
|
|
% Growth
|
||||
Net Sales by Product Category
|
|
|
|
|
|
||||
Peripheral Vascular
|
$
|
208,602
|
|
|
$
|
205,620
|
|
|
1%
|
Vascular Access
|
96,481
|
|
|
99,375
|
|
|
(3)%
|
||
Oncology/Surgery
|
44,560
|
|
|
48,895
|
|
|
(9)%
|
||
Total
|
$
|
349,643
|
|
|
$
|
353,890
|
|
|
(1)%
|
|
|
|
|
|
|
||||
Net Sales by Geography
|
|
|
|
|
|
||||
United States
|
$
|
282,168
|
|
|
$
|
285,824
|
|
|
(1)%
|
International
|
67,475
|
|
|
68,066
|
|
|
(1)%
|
||
Total
|
$
|
349,643
|
|
|
$
|
353,890
|
|
|
(1)%
|
•
|
Consolidated and U.S. net sales decreased from the prior year as a result of decreased net sales from Vascular Access and Oncology Surgery. This decrease was partially offset by 1% year over year growth in our Peripheral Vascular franchise.
|
•
|
Total Peripheral Vascular sales increased
$3.0 million
primarily attributable to increased sales volume of Angiographic and Core products of $9.9 million. This increased sales volume was partially offset by a decrease of volume in Fluid Management, Venous and AngioVac of $5.6 million. The decrease in Fluid Management was attributed to a discontinuance of our inflation device and automation challenges in the European markets. Although AngioVac procedures were up year over year, AngioVac unit sales decreased by $1.4 million due to available inventory already in the market place.
|
•
|
U.S. Peripheral Vascular sales increased $2.8 million and international Peripheral Vascular sales increased $0.2 million which was primarily due to increased sales volume of Angiographic catheters. This increased sales volume was offset by a decrease in volume in Fluid Management, Venous and AngioVac.
|
•
|
Total Vascular Access sales decreased
$2.9 million
primarily in our non-BioFlo businesses. Our BioFlo product line grew by $4.8 million primarily driven by growth in Midlines.
|
•
|
U.S. Vascular Access sales declined by 5% due to softness across the portfolio offset by Midline and BioFlo dialysis which continued to gain traction in the marketplace.
|
•
|
International Vascular Access sales increased 15% due to the market penetration of BioFlo PICCs.
|
•
|
Total Oncology/Surgery sales decreased
$4.3 million
year over year primarily due to fewer sales of capital units in Microwave and NanoKnife as well as the $2.6 million deferral of revenue related to the Acculis probe recall that was announced in the fourth quarter of fiscal year 2017.
|
•
|
U.S. Oncology/Surgery declined by 8%, driven primarily through lower capital and disposable sales in Radio Frequency and Microwave offset by NanoKnife growth. The decrease is also attributed to a $1.4 million deferral of revenue related to the Acculis probe recall that was announced in the fourth quarter of fiscal year 2017.
|
•
|
International Oncology/Surgery sales decreased 10% year over year as a result of lower NanoKnife capital and disposable sales and a $1.2 million deferral of revenue related to the Acculis probe recall that was announced in the fourth quarter of fiscal year 2017.
|
|
|
Year ended May 31,
|
|||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
% Change
|
|||||
Gross profit
|
|
$
|
176,169
|
|
|
$
|
174,316
|
|
|
1.1
|
%
|
Gross profit % of sales
|
|
50.4
|
%
|
|
49.3
|
%
|
|
|
|||
Research and development
|
|
$
|
25,269
|
|
|
$
|
25,053
|
|
|
0.9
|
%
|
% of sales
|
|
7.2
|
%
|
|
7.1
|
%
|
|
|
|||
Selling and marketing
|
|
$
|
78,819
|
|
|
$
|
83,743
|
|
|
(5.9
|
)%
|
% of sales
|
|
22.5
|
%
|
|
23.7
|
%
|
|
|
|||
General and administrative
|
|
$
|
31,406
|
|
|
$
|
30,583
|
|
|
2.7
|
%
|
% of sales
|
|
9.0
|
%
|
|
8.6
|
%
|
|
|
•
|
In fiscal year 2017, a net charge of $4.5 million was recorded as a result of the Acculis probe recall.
|
•
|
In fiscal year 2016, a $5.9 million charge related to the write-off of Celerity inventory on hand and hardware assets after the business decision to no longer pursue the Celerity Navigation project.
|
•
|
The remaining increase is driven by net productivity offset by price and mix of products.
|
•
|
The increase in gross profit as a percentage of
1.1%
is attributed to the factors noted above.
|
•
|
Increased headcount in the R&D department compared to the prior year resulted in $1.2 million in additional expense as well as expenses associated with consultants of $0.6 million and severance of $0.4 million.
|
•
|
These increases were partially offset by less project spend of $1.2 million, $0.6 million in samples and $0.2 million in travel and other expenses.
|
•
|
R&D expense as a percentage of sales remained consistent year over year.
|
•
|
There was a decrease in headcount from the prior year which resulted in a $2.5 million decrease in salaries and benefits.
|
•
|
The decrease in headcount along with a focus on reduced travel spend resulted in a decrease in travel expenses of $1.3 million.
|
•
|
There was a $0.7 million decrease in trade shows and meeting expenses along with a $0.7 million decrease in samples as a result of a focus on reducing expenses.
|
•
|
These decreases were partially offset by severance of $0.8 million.
|
•
|
As a result of these decreases in S&M expenses, the percentage of S&M to sales decreased 1.2%.
|
•
|
Increased stock based compensation expense related to the new grant for the CEO along with two new board members of $1.7 million. Along with the stock based compensation increase, bonus for fiscal year 2017 was accrued at a higher rate than the prior year which resulted in a $1.0 million increase to G&A expense.
|
•
|
Along with the appointment of new members in the executive leadership team, recruiting and relocation expenses resulted in an increase of $0.5 million from the prior year
|
•
|
There was also an increase in professional fees of $0.3 million related to audit fees and director fees partially offset by a decrease in legal fees.
|
•
|
These increases were partially offset by decreases in compensation benefits of $0.5 million as a result of a reduction in benefit claims, depreciation expense of $0.8 million, $0.2 million in facilities expenses including insurance, lease expenses and utilities, bad debt favorability of $0.4 million and other miscellaneous decreases in expenses of $0.4 million.
|
|
|
Year ended May 31,
|
||||||||||
(in thousands)
|
|
2017
|
|
2016
|
|
$ Change
|
||||||
Amortization of intangibles
|
|
$
|
17,296
|
|
|
$
|
17,964
|
|
|
$
|
(668
|
)
|
Change in fair value of contingent consideration
|
|
$
|
(15,261
|
)
|
|
$
|
948
|
|
|
$
|
(16,209
|
)
|
Acquisition, restructuring and other items, net
|
|
$
|
27,510
|
|
|
$
|
12,591
|
|
|
$
|
14,919
|
|
Medical device excise tax
|
|
$
|
(1,837
|
)
|
|
$
|
2,416
|
|
|
$
|
(4,253
|
)
|
Other expense
|
|
$
|
(3,120
|
)
|
|
$
|
(4,271
|
)
|
|
$
|
1,151
|
|
•
|
The decrease of $0.7 million is primarily related to intangible assets that became fully amortized.
|
•
|
The decrease is due to a write-off of $13.4 million that was taken on the AngioVac product as a result of decreases in future sales projections that eliminated any payments above minimums and a write-off of $3.1 million on the TiLo product as the milestone will not be achieved. This was partially offset by normal amortization of the present value discount on the contingent liabilities.
|
•
|
In Q2 fiscal year 2017, the intangible assets associated with TiLo were written off for $3.6 million as a result of the decision to discontinue our investment in the TiLo product along with a $2.0 million write-off of the investment in Embomedics due to termination of the agreement. The prior year had asset impairments of $0.4 million.
|
•
|
There was $1.3 million of expense related to the plant consolidation which consisted mainly of severance and start-up costs to move the product lines including equipment transfer expenses, accelerated depreciation for assets that will not be transferred, validation and other start up costs. The prior year had accelerated depreciation related to the Operational Excellence program of $1.0 million along with $0.5 million in other expenses.
|
•
|
A litigation settlement accrual for $12.5 million was recorded in the fourth quarter of fiscal year 2017.
|
•
|
Legal expenses of $7.0 million which was a decrease of $0.5 million from the prior year.
|
•
|
Other miscellaneous items decreased $2.2 million from the prior year primarily attributable to a decrease in M&A expenses of $2.5 million offset by a gain in the prior year of $0.7 million related to the modification of stock based compensation awards for the former CEO.
|
•
|
The Medical Device Excise Tax was suspended on January 1, 2016 therefore, fiscal year 2016 had seven months of the tax. In the current year, there is a $1.8 million refund from the Internal Revenue Service related to prior medical device taxes paid.
|
•
|
The decrease in other expenses of $1.2 million was due to lower interest expense on lower outstanding debt and lower interest rates under the Credit Agreement along with unrealized foreign currency gains from re-measurement offset by the write off of the deferred financing fees from the original credit facility.
|
|
|
Year ended May 31,
|
||||||
(in thousands)
|
|
2017
|
|
2016
|
||||
Income tax expense (benefit)
|
|
$
|
4,839
|
|
|
$
|
40,337
|
|
Effective tax rate including discrete items
|
|
49
|
%
|
|
(1,240
|
)%
|
|
Year ended May 31,
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
41,287
|
|
|
$
|
55,745
|
|
|
$
|
45,216
|
|
Investing activities
|
(3,656
|
)
|
|
(2,551
|
)
|
|
(7,569
|
)
|
|||
Financing activities
|
(11,551
|
)
|
|
(37,983
|
)
|
|
(23,663
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
472
|
|
|
—
|
|
|
(42
|
)
|
|||
Net change in cash and cash equivalents
|
$
|
26,552
|
|
|
$
|
15,211
|
|
|
$
|
13,942
|
|
•
|
Net income was driven by higher gross margin, lower operating expenses in selling and marketing, general and administrative and acquisition, restructuring and other items, net. Partially offsetting the positive cash impact was a $9.3 million non-cash discrete tax benefit as a result of the Tax Reform Act and the revaluation of the Company's deferred tax assets and liabilities to reflect the lower statutory rate.
|
•
|
The Company continues to focus on optimizing days sales outstanding ("DSO") which contributed $5.0 million to working capital improvement. Working capital was also positively impacted by decreased inventory on hand of $5.7 million. Even though the Company continued to optimize days payables outstanding ("DPO"), the decrease in raw material purchases at year end negatively impacted working capital from accounts payable and accrued liabilities.
|
•
|
Net income was driven by higher gross margins, lower sales and marketing expenses as well as the medical device tax refund. Also impacting net income, were non-cash items which consisted of $15.3 million of contingent consideration gains, $2.0 million in the write-off of the Embomedics investment and $3.6 million in intangible write-offs related to TiLo.
|
•
|
With regards to working capital, the Company focused on optimizing both DSO and DPO which contributed to $15.2 million of working capital improvement. With respect to inventory, the $2.4 million reserve for Acculis inventory partially offset the inventory build related to the plant consolidation.
|
•
|
DSO improvement and inventory management, coupled with reductions in payables and accrued expenses contributed to $12.9 million improvement in operating activities. The $12.9 million improvement includes approximately $4.8 million in non-cash changes to inventory reserves.
|
•
|
$2.4 million in fixed asset additions.
|
•
|
In the third quarter, we entered into a distribution and license agreement where we recorded the upfront license fee of $1.3 million as an intangible asset that will be amortized over thirty-six months.
|
•
|
$3.0 million in fixed asset additions.
|
•
|
$0.5 million in proceeds from an auction rate security that was called during fiscal year 2017.
|
•
|
$2.3 million in fixed asset additions.
|
•
|
$2.0 million in warrant additions related to EmboMedics and $3.3 million in intangible asset additions related to the Asclera Distribution Agreement.
|
•
|
$5.0 million in repayments on long-term debt, consistent with the required amortization payment on the Term Loan.
|
•
|
$2.9 million of proceeds from stock option and ESPP activity.
|
•
|
$9.5 million payment on earn-out liabilities.
|
•
|
Net $23.9 million in repayments on long-term debt after the proceeds from the Credit Agreement and repayment of the old credit agreement.
|
•
|
$1.3 million in deferred financing fees related to the new credit agreement.
|
•
|
$10.7 million of proceeds from stock option and ESPP. The large increase is related to the exercise of stock based awards from executive management turnover that took place in fiscal year 2017.
|
•
|
$9.9 million payment on earn-out liabilities.
|
•
|
$13.6 million from the repurchase of common shares in fiscal 2017.
|
•
|
Net $16.3 million in repayments on long-term debt.
|
•
|
$2.4 million of proceeds from stock option and ESPP activity.
|
•
|
$9.9 million payment on earn-out liabilities.
|
|
Cash Payments Due By Period as of May 31, 2018
|
||||||||||||||||||
(in thousands)
|
Total
|
|
Less than
One Year
|
|
1-3 Years
|
|
3-5 Years
|
|
After 5
Years
|
||||||||||
Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long term debt and interest
|
$
|
103,281
|
|
|
$
|
8,383
|
|
|
$
|
94,898
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating leases
(1)
|
7,608
|
|
|
2,234
|
|
|
3,706
|
|
|
1,668
|
|
|
—
|
|
|||||
Purchase obligations
(1)
|
56,201
|
|
|
11,751
|
|
|
38,917
|
|
|
5,533
|
|
|
—
|
|
|||||
Acquisition-related future obligations
(2)
|
3,308
|
|
|
2,100
|
|
|
1,208
|
|
|
—
|
|
|
—
|
|
|||||
Royalties
|
45,000
|
|
|
3,000
|
|
|
10,500
|
|
|
10,500
|
|
|
21,000
|
|
|||||
Litigation matters
(3)
|
12,500
|
|
|
12,500
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other
|
667
|
|
|
167
|
|
|
500
|
|
|
—
|
|
|
—
|
|
|||||
|
$
|
228,565
|
|
|
$
|
40,135
|
|
|
$
|
149,729
|
|
|
$
|
17,701
|
|
|
$
|
21,000
|
|
(1)
|
The non-cancelable operating leases and inventory purchase obligations are not reflected on our consolidated balance sheets under accounting principles generally accepted in the United States of America.
|
(2)
|
Acquisition-related future obligations include scheduled minimum payments and contingent payments based upon achievement of performance measures or milestones such as sales or profitability targets, the achievement of research and development objectives or the receipt of regulatory approvals. The amount represents the undiscounted value of contingent liabilities recorded on the balance sheet. Timing of payments are as contractually scheduled, or where contingent, the Company's best estimate of payment timing.
|
(3)
|
This was paid in the first quarter of fiscal year 2019.
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
Item 8.
|
Financial Statements and Supplementary Data.
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Controls and Procedures.
|
•
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that our receipts and expenditures are being made only in accordance with authorizations of our management and members of our board of directors; and
|
•
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Item 11.
|
Executive Compensation.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accounting Fees and Services.
|
Item 15.
|
Exhibits, Financial Statement Schedules.
|
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
||
|
|
|
Year ended May 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales
|
$
|
344,285
|
|
|
$
|
349,643
|
|
|
$
|
353,890
|
|
Cost of sales (exclusive of intangible amortization)
|
167,410
|
|
|
173,474
|
|
|
179,574
|
|
|||
Gross profit
|
176,875
|
|
|
176,169
|
|
|
174,316
|
|
|||
Operating expenses
|
|
|
|
|
|
||||||
Research and development
|
25,459
|
|
|
25,269
|
|
|
25,053
|
|
|||
Sales and marketing
|
77,276
|
|
|
78,819
|
|
|
83,743
|
|
|||
General and administrative
|
31,265
|
|
|
31,406
|
|
|
30,583
|
|
|||
Amortization of intangibles
|
16,635
|
|
|
17,296
|
|
|
17,964
|
|
|||
Change in fair value of contingent consideration
|
250
|
|
|
(15,261
|
)
|
|
948
|
|
|||
Acquisition, restructuring and other items, net
|
15,432
|
|
|
27,510
|
|
|
12,591
|
|
|||
Medical device excise tax
|
—
|
|
|
(1,837
|
)
|
|
2,416
|
|
|||
Total operating expenses
|
166,317
|
|
|
163,202
|
|
|
173,298
|
|
|||
Operating income
|
10,558
|
|
|
12,967
|
|
|
1,018
|
|
|||
Other expenses
|
|
|
|
|
|
||||||
Interest expense, net
|
(3,062
|
)
|
|
(2,839
|
)
|
|
(3,385
|
)
|
|||
Other expense
|
(31
|
)
|
|
(281
|
)
|
|
(886
|
)
|
|||
Total other expenses, net
|
(3,093
|
)
|
|
(3,120
|
)
|
|
(4,271
|
)
|
|||
Income (loss) before income tax expense (benefit)
|
7,465
|
|
|
9,847
|
|
|
(3,253
|
)
|
|||
Income tax expense (benefit)
|
(8,870
|
)
|
|
4,839
|
|
|
40,337
|
|
|||
Net income (loss)
|
$
|
16,335
|
|
|
$
|
5,008
|
|
|
$
|
(43,590
|
)
|
Earnings (loss) per share
|
|
|
|
|
|
||||||
Basic
|
$
|
0.44
|
|
|
$
|
0.14
|
|
|
$
|
(1.21
|
)
|
Diluted
|
$
|
0.44
|
|
|
$
|
0.14
|
|
|
$
|
(1.21
|
)
|
Weighted average shares outstanding
|
|
|
|
|
|
||||||
Basic
|
37,075
|
|
|
36,617
|
|
|
36,161
|
|
|||
Diluted
|
37,539
|
|
|
36,959
|
|
|
36,161
|
|
|
Year ended May 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income (loss)
|
$
|
16,335
|
|
|
$
|
5,008
|
|
|
$
|
(43,590
|
)
|
Other comprehensive income (loss), before tax:
|
|
|
|
|
|
||||||
Unrealized gain (loss) on marketable securities
|
102
|
|
|
12
|
|
|
(11
|
)
|
|||
Unrealized gain on interest rate swap
|
—
|
|
|
—
|
|
|
257
|
|
|||
Foreign currency translation gain (loss)
|
270
|
|
|
(545
|
)
|
|
(112
|
)
|
|||
Other comprehensive income (loss), before tax
|
372
|
|
|
(533
|
)
|
|
134
|
|
|||
Income tax benefit (expense) related to items of other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
(92
|
)
|
|||
Other comprehensive income (loss), net of tax
|
372
|
|
|
(533
|
)
|
|
42
|
|
|||
Total comprehensive income (loss), net of tax
|
$
|
16,707
|
|
|
$
|
4,475
|
|
|
$
|
(43,548
|
)
|
|
May 31, 2018
|
|
May 31, 2017
|
||||
Assets
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
74,096
|
|
|
$
|
47,544
|
|
Marketable securities, at fair value
|
1,317
|
|
|
1,215
|
|
||
Accounts receivable, net of allowances of $2,466 and $2,945, respectively
|
39,401
|
|
|
44,523
|
|
||
Inventories
|
48,916
|
|
|
54,506
|
|
||
Prepaid expenses and other
|
4,302
|
|
|
6,126
|
|
||
Total current assets
|
168,032
|
|
|
153,914
|
|
||
Property, plant and equipment, net
|
42,461
|
|
|
45,234
|
|
||
Other assets
|
3,417
|
|
|
1,886
|
|
||
Intangible assets, net
|
130,310
|
|
|
145,675
|
|
||
Goodwill
|
361,252
|
|
|
361,252
|
|
||
Total Assets
|
$
|
705,472
|
|
|
$
|
707,961
|
|
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
15,775
|
|
|
$
|
18,087
|
|
Accrued liabilities
|
34,426
|
|
|
38,804
|
|
||
Current portion of long-term debt
|
5,000
|
|
|
5,000
|
|
||
Current portion of contingent consideration
|
2,100
|
|
|
9,625
|
|
||
Total current liabilities
|
57,301
|
|
|
71,516
|
|
||
Long-term debt, net of current portion
|
86,621
|
|
|
91,320
|
|
||
Deferred income taxes
|
17,173
|
|
|
26,112
|
|
||
Contingent consideration, net of current portion
|
1,161
|
|
|
3,136
|
|
||
Other long-term liabilities
|
621
|
|
|
850
|
|
||
Total Liabilities
|
162,877
|
|
|
192,934
|
|
||
Commitments and Contingencies (Note 15)
|
|
|
|
||||
Stockholders’ Equity
|
|
|
|
||||
Preferred stock, par value $.01 per share, 5,000,000 shares authorized; no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, par value $.01 per share, 75,000,000 shares authorized; 37,594,493 and 37,210,091 shares issued and 37,224,493 and 36,840,091 shares outstanding at May 31, 2018 and 2017, respectively
|
370
|
|
|
367
|
|
||
Additional paid-in capital
|
543,762
|
|
|
532,705
|
|
||
Retained earnings (accumulated deficit)
|
5,129
|
|
|
(11,007
|
)
|
||
Treasury stock, 370,000 shares, at cost at May 31, 2018 and 2017, respectively
|
(5,714
|
)
|
|
(5,714
|
)
|
||
Accumulated other comprehensive loss
|
(952
|
)
|
|
(1,324
|
)
|
||
Total Stockholders' Equity
|
542,595
|
|
|
515,027
|
|
||
Total Liabilities and Stockholders' Equity
|
$
|
705,472
|
|
|
$
|
707,961
|
|
|
Common Stock
|
|
Additional
paid in
capital
|
|
Retained
earnings (accumulated deficit)
|
|
Accumulated
other
comprehensive
loss
|
|
Treasury Stock
|
|
Total
|
||||||||||||||||||
Shares
|
|
Amount
|
|
|
|
|
Shares
|
|
Amount
|
||||||||||||||||||||
Balance at May 31, 2015
|
36,043,725
|
|
|
$
|
360
|
|
|
$
|
520,101
|
|
|
$
|
27,575
|
|
|
$
|
(833
|
)
|
|
(142,305
|
)
|
|
$
|
(2,104
|
)
|
|
$
|
545,099
|
|
Net loss
|
|
|
|
|
|
|
(43,590
|
)
|
|
|
|
|
|
|
|
(43,590
|
)
|
||||||||||||
Exercise of stock options
|
101,040
|
|
|
1
|
|
|
1,296
|
|
|
|
|
|
|
|
|
|
|
1,297
|
|
||||||||||
Issuance/cancellation of restricted stock units
|
137,681
|
|
|
1
|
|
|
(332
|
)
|
|
|
|
|
|
|
|
|
|
(331
|
)
|
||||||||||
Purchase of common stock under Employee Stock Purchase Plan
|
137,957
|
|
|
1
|
|
|
1,470
|
|
|
|
|
|
|
|
|
|
|
1,471
|
|
||||||||||
Stock-based compensation
|
|
|
|
|
3,240
|
|
|
|
|
|
|
|
|
|
|
3,240
|
|
||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
42
|
|
|
|
|
|
|
42
|
|
||||||||||||
Balance at May 31, 2016
|
36,420,403
|
|
|
$
|
363
|
|
|
$
|
525,775
|
|
|
$
|
(16,015
|
)
|
|
$
|
(791
|
)
|
|
(142,305
|
)
|
|
$
|
(2,104
|
)
|
|
$
|
507,228
|
|
Net income
|
|
|
|
|
|
|
5,008
|
|
|
|
|
|
|
|
|
5,008
|
|
||||||||||||
Exercise of stock options
|
751,062
|
|
|
7
|
|
|
9,858
|
|
|
|
|
|
|
|
|
|
|
9,865
|
|
||||||||||
Issuance/cancellation of restricted stock units
|
158,341
|
|
|
1
|
|
|
(587
|
)
|
|
|
|
|
|
|
|
|
|
(586
|
)
|
||||||||||
Issuance of performance share units
|
23,405
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
—
|
|
||||||||||
Purchase of common stock under Employee Stock Purchase Plan
|
129,185
|
|
|
1
|
|
|
1,418
|
|
|
|
|
|
|
|
|
|
|
1,419
|
|
||||||||||
Stock-based compensation
|
|
|
|
|
6,183
|
|
|
|
|
|
|
|
|
|
|
6,183
|
|
||||||||||||
Treasury stock retirement
|
(642,305
|
)
|
|
(2
|
)
|
|
(9,942
|
)
|
|
|
|
|
|
642,305
|
|
|
9,944
|
|
|
—
|
|
||||||||
Common stock repurchased
|
370,000
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
(870,000
|
)
|
|
(13,554
|
)
|
|
(13,557
|
)
|
|||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
(533
|
)
|
|
|
|
|
|
(533
|
)
|
||||||||||||
Balance at May 31, 2017
|
37,210,091
|
|
|
$
|
367
|
|
|
$
|
532,705
|
|
|
$
|
(11,007
|
)
|
|
$
|
(1,324
|
)
|
|
(370,000
|
)
|
|
$
|
(5,714
|
)
|
|
$
|
515,027
|
|
Adjustment for ASU 2016-09
|
|
|
|
|
199
|
|
|
(199
|
)
|
|
|
|
|
|
|
|
—
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
16,335
|
|
|
|
|
|
|
|
|
16,335
|
|
||||||||||||
Exercise of stock options
|
148,937
|
|
|
1
|
|
|
1,916
|
|
|
|
|
|
|
|
|
|
|
1,917
|
|
||||||||||
Issuance/cancellation of restricted stock units
|
145,522
|
|
|
1
|
|
|
(232
|
)
|
|
|
|
|
|
|
|
|
|
(231
|
)
|
||||||||||
Purchase of common stock under Employee Stock Purchase Plan
|
89,943
|
|
|
1
|
|
|
1,262
|
|
|
|
|
|
|
|
|
|
|
1,263
|
|
||||||||||
Stock-based compensation
|
|
|
|
|
7,912
|
|
|
|
|
|
|
|
|
|
|
7,912
|
|
||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
372
|
|
|
|
|
|
|
372
|
|
||||||||||||
Balance at May 31, 2018
|
37,594,493
|
|
|
$
|
370
|
|
|
$
|
543,762
|
|
|
$
|
5,129
|
|
|
$
|
(952
|
)
|
|
(370,000
|
)
|
|
$
|
(5,714
|
)
|
|
$
|
542,595
|
|
|
Year ended May 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
16,335
|
|
|
$
|
5,008
|
|
|
$
|
(43,590
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
23,163
|
|
|
24,811
|
|
|
28,115
|
|
|||
Stock based compensation
|
7,912
|
|
|
6,183
|
|
|
3,240
|
|
|||
Change in fair value of contingent consideration
|
250
|
|
|
(15,261
|
)
|
|
948
|
|
|||
Deferred income tax provision
|
(8,947
|
)
|
|
4,428
|
|
|
39,983
|
|
|||
Changes in accounts receivable allowances
|
179
|
|
|
(313
|
)
|
|
2,377
|
|
|||
Fixed and intangible asset impairments and disposals
|
540
|
|
|
3,930
|
|
|
1,190
|
|
|||
Write-off of other assets
|
—
|
|
|
2,685
|
|
|
—
|
|
|||
Other
|
(605
|
)
|
|
(586
|
)
|
|
90
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
5,044
|
|
|
8,479
|
|
|
3,131
|
|
|||
Inventories
|
5,740
|
|
|
687
|
|
|
11,976
|
|
|||
Prepaid expenses and other
|
(1,231
|
)
|
|
(3,520
|
)
|
|
712
|
|
|||
Accounts payable, accrued and other liabilities
|
(7,093
|
)
|
|
19,214
|
|
|
(2,956
|
)
|
|||
Net cash provided by operating activities
|
41,287
|
|
|
55,745
|
|
|
45,216
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Additions to property, plant and equipment
|
(2,391
|
)
|
|
(3,001
|
)
|
|
(2,326
|
)
|
|||
Acquisition of intangibles
|
(1,265
|
)
|
|
—
|
|
|
(3,268
|
)
|
|||
Acquisition of warrants
|
—
|
|
|
—
|
|
|
(2,000
|
)
|
|||
Proceeds from sale or maturity of marketable securities
|
—
|
|
|
450
|
|
|
25
|
|
|||
Net cash used in investing activities
|
(3,656
|
)
|
|
(2,551
|
)
|
|
(7,569
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of and borrowings on long-term debt
|
—
|
|
|
116,471
|
|
|
—
|
|
|||
Repayment of long-term debt
|
(5,000
|
)
|
|
(140,381
|
)
|
|
(16,250
|
)
|
|||
Deferred financing costs on long-term debt
|
—
|
|
|
(1,364
|
)
|
|
—
|
|
|||
Payment of acquisition related contingent consideration
|
(9,500
|
)
|
|
(9,850
|
)
|
|
(9,850
|
)
|
|||
Repurchase of common stock
|
—
|
|
|
(13,557
|
)
|
|
—
|
|
|||
Proceeds from exercise of stock options and employee stock purchase plan
|
2,949
|
|
|
10,698
|
|
|
2,437
|
|
|||
Net cash used in financing activities
|
(11,551
|
)
|
|
(37,983
|
)
|
|
(23,663
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
472
|
|
|
—
|
|
|
(42
|
)
|
|||
Increase in cash and cash equivalents
|
26,552
|
|
|
15,211
|
|
|
13,942
|
|
|||
Cash and cash equivalents at beginning of year
|
47,544
|
|
|
32,333
|
|
|
18,391
|
|
|||
Cash and cash equivalents at end of year
|
$
|
74,096
|
|
|
$
|
47,544
|
|
|
$
|
32,333
|
|
|
Year ended May 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Supplemental disclosure of non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Contractual obligations for purchase of fixed assets
|
$
|
56
|
|
|
$
|
26
|
|
|
$
|
75
|
|
Cash paid (received) during the year for:
|
|
|
|
|
|
||||||
Interest
|
$
|
3,190
|
|
|
$
|
2,969
|
|
|
$
|
3,063
|
|
Income taxes
|
36
|
|
|
(102
|
)
|
|
332
|
|
|
|
Estimated useful lives
|
Building and building improvements
|
|
39 years
|
Machinery and equipment
|
|
5 to 8 years
|
Computer software and equipment
|
|
3 to 5 years
|
•
|
Level 1 - Inputs to the valuation methodology are quoted market prices for identical assets or liabilities.
|
•
|
Level 2 - Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets or liabilities and market-corroborated inputs.
|
•
|
Level 3 - Inputs to the valuation methodology are unobservable inputs based on management’s best estimate of inputs market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk.
|
|
Fair Value Measurements using inputs considered as:
|
||||||||||||||
(in thousands)
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Fair Value at May 31, 2017
|
||||||||
Financial Assets
|
|
|
|
|
|
|
|
||||||||
Marketable securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,215
|
|
|
$
|
1,215
|
|
Total Financial Assets
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,215
|
|
|
$
|
1,215
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
||||||||
Contingent liability for acquisition earn outs
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,761
|
|
|
$
|
12,761
|
|
Total Financial Liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,761
|
|
|
$
|
12,761
|
|
|
Financial Assets
|
|
Financial Liabilities
|
||||
(in thousands)
|
Fair Value Measurements
Using Significant Unobservable Inputs (Level 3) |
|
Fair Value Measurements
Using Significant Unobservable Inputs (Level 3) |
||||
Balance at May 31, 2017
|
$
|
1,215
|
|
|
$
|
12,761
|
|
Change in fair value of contingent consideration, net
(1)
|
—
|
|
|
250
|
|
||
Fair market value adjustments
|
102
|
|
|
—
|
|
||
Contingent consideration payments
|
—
|
|
|
(9,750
|
)
|
||
Balance at May 31, 2018
|
$
|
1,317
|
|
|
$
|
3,261
|
|
|
Financial Assets
|
|
Financial Liabilities
|
||||
(in thousands)
|
Fair Value Measurements
Using Significant Unobservable Inputs (Level 3) |
|
Fair Value Measurements
Using Significant Unobservable Inputs (Level 3) |
||||
Balance at May 31, 2016
|
$
|
1,653
|
|
|
$
|
38,275
|
|
Change in fair value of contingent consideration (1)
|
—
|
|
|
(15,261
|
)
|
||
Currency (gain) loss from remeasurement
|
—
|
|
|
(153
|
)
|
||
Fair market value adjustments
|
12
|
|
|
—
|
|
||
Sale of securities
|
(450
|
)
|
|
—
|
|
||
Contingent consideration payments
|
—
|
|
|
(10,100
|
)
|
||
Balance at May 31, 2017
|
$
|
1,215
|
|
|
$
|
12,761
|
|
(in thousands)
|
Fair value at
May 31, 2018
|
|
Valuation
Technique
|
|
Unobservable
Input
|
|
Range
|
||
Revenue based payments
|
$
|
3,261
|
|
|
Discounted cash flow
|
|
Discount rate
Probability of payment Projected fiscal year of payment |
|
4%
100% 2019 - 2020 |
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
(in thousands)
|
|
||||||||||||||
Available-for-sales securities
|
|
|
|
|
|
|
|
||||||||
New York State government agency obligations
|
$
|
1,350
|
|
|
$
|
—
|
|
|
$
|
(33
|
)
|
|
$
|
1,317
|
|
|
$
|
1,350
|
|
|
$
|
—
|
|
|
$
|
(33
|
)
|
|
$
|
1,317
|
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair
Value
|
||||||||
(in thousands)
|
|
||||||||||||||
Available-for-sales securities
|
|
|
|
|
|
|
|
||||||||
New York State government agency obligations
|
$
|
1,350
|
|
|
$
|
—
|
|
|
$
|
(135
|
)
|
|
$
|
1,215
|
|
|
$
|
1,350
|
|
|
$
|
—
|
|
|
$
|
(135
|
)
|
|
$
|
1,215
|
|
|
Amortized
Cost
|
|
Fair
Value
|
||||
(in thousands)
|
|
||||||
As of May 31, 2018:
|
|
|
|
||||
Due in one year or less
|
$
|
—
|
|
|
$
|
—
|
|
Due after one through five years
|
—
|
|
|
—
|
|
||
Due after five through twenty years
(1)
|
1,350
|
|
|
1,317
|
|
||
|
$
|
1,350
|
|
|
$
|
1,317
|
|
|
May 31, 2018
|
|
May 31, 2017
|
||||
(in thousands)
|
|
||||||
Raw materials
|
$
|
18,678
|
|
|
$
|
17,563
|
|
Work in process
|
10,808
|
|
|
12,602
|
|
||
Finished goods
|
19,430
|
|
|
24,341
|
|
||
Total
|
$
|
48,916
|
|
|
$
|
54,506
|
|
|
May 31, 2018
|
|
May 31, 2017
|
||||
(in thousands)
|
|
||||||
Software licenses
|
$
|
1,043
|
|
|
$
|
582
|
|
License fees
|
143
|
|
|
118
|
|
||
Trade shows
|
223
|
|
|
162
|
|
||
Rent
|
134
|
|
|
121
|
|
||
Other prepaid taxes
|
254
|
|
|
544
|
|
||
Medical device excise tax receivable
|
—
|
|
|
1,837
|
|
||
Other
|
2,505
|
|
|
2,762
|
|
||
Total
|
$
|
4,302
|
|
|
$
|
6,126
|
|
|
May 31, 2018
|
|
May 31, 2017
|
||||
(in thousands)
|
|
||||||
Building and building improvements
|
$
|
39,887
|
|
|
$
|
40,597
|
|
Machinery and equipment
|
22,668
|
|
|
25,434
|
|
||
Computer software and equipment
|
24,899
|
|
|
25,668
|
|
||
Construction in progress
|
2,153
|
|
|
1,464
|
|
||
|
89,607
|
|
|
93,163
|
|
||
Less accumulated depreciation and amortization
|
(48,794
|
)
|
|
(49,652
|
)
|
||
|
40,813
|
|
|
43,511
|
|
||
Land and land improvements
|
1,648
|
|
|
1,723
|
|
||
|
$
|
42,461
|
|
|
$
|
45,234
|
|
|
May 31, 2018
|
||||||||||
|
Gross carrying
value
|
|
Accumulated
amortization
|
|
Net carrying
value
|
||||||
(in thousands)
|
|
||||||||||
Product technologies
|
$
|
147,175
|
|
|
$
|
(68,880
|
)
|
|
$
|
78,295
|
|
Customer relationships
|
56,428
|
|
|
(23,237
|
)
|
|
33,191
|
|
|||
Trademarks
|
28,400
|
|
|
(11,809
|
)
|
|
16,591
|
|
|||
Licenses
|
5,752
|
|
|
(4,357
|
)
|
|
1,395
|
|
|||
Distributor relationships
|
1,250
|
|
|
(412
|
)
|
|
838
|
|
|||
|
$
|
239,005
|
|
|
$
|
(108,695
|
)
|
|
$
|
130,310
|
|
|
May 31, 2017
|
||||||||||
|
Gross carrying
value
|
|
Accumulated
amortization
|
|
Net carrying
value
|
||||||
(in thousands)
|
|
||||||||||
Product technologies
|
$
|
147,172
|
|
|
$
|
(59,696
|
)
|
|
$
|
87,476
|
|
Customer relationships
|
56,375
|
|
|
(19,194
|
)
|
|
37,181
|
|
|||
Trademarks
|
28,400
|
|
|
(9,069
|
)
|
|
19,331
|
|
|||
Licenses
|
4,487
|
|
|
(3,821
|
)
|
|
666
|
|
|||
Distributor relationships
|
1,250
|
|
|
(229
|
)
|
|
1,021
|
|
|||
|
$
|
237,684
|
|
|
$
|
(92,009
|
)
|
|
$
|
145,675
|
|
(in thousands)
|
|
||
2019
|
$
|
16,555
|
|
2020
|
15,001
|
|
|
2021
|
13,842
|
|
|
2022
|
12,958
|
|
|
2023
|
12,507
|
|
|
2024 and thereafter
|
59,447
|
|
|
|
$
|
130,310
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
(in thousands)
|
|
||||||||||
Income (loss) before tax expense:
|
|
|
|
|
|
||||||
U.S.
|
$
|
6,274
|
|
|
$
|
8,825
|
|
|
$
|
(4,444
|
)
|
Non-U.S.
|
1,191
|
|
|
1,022
|
|
|
1,191
|
|
|||
|
$
|
7,465
|
|
|
$
|
9,847
|
|
|
$
|
(3,253
|
)
|
|
2018
|
|
2017
|
|
2016
|
||||||
(in thousands)
|
|
||||||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
(148
|
)
|
|
$
|
—
|
|
|
$
|
34
|
|
State and local
|
152
|
|
|
141
|
|
|
103
|
|
|||
Non U.S.
|
73
|
|
|
270
|
|
|
217
|
|
|||
|
77
|
|
|
411
|
|
|
354
|
|
|||
Deferred
|
(8,947
|
)
|
|
4,428
|
|
|
39,983
|
|
|||
Income tax (benefit) expense
|
$
|
(8,870
|
)
|
|
$
|
4,839
|
|
|
$
|
40,337
|
|
|
May 31, 2018
|
|
May 31, 2017
|
||||
(in thousands)
|
|
||||||
Deferred tax assets
|
|
|
|
||||
Net operating loss carryforward
|
$
|
33,880
|
|
|
$
|
55,975
|
|
Stock-based compensation
|
2,421
|
|
|
2,653
|
|
||
Federal and state R&D tax credit carryforward
|
3,644
|
|
|
2,548
|
|
||
Inventories
|
1,550
|
|
|
2,407
|
|
||
Expenses incurred not currently deductible
|
1,714
|
|
|
6,522
|
|
||
Accrued liabilities
|
277
|
|
|
1,289
|
|
||
Gross deferred tax asset
|
43,486
|
|
|
71,394
|
|
||
Deferred tax liabilities
|
|
|
|
||||
Excess tax over book depreciation and amortization
|
34,044
|
|
|
49,158
|
|
||
|
34,044
|
|
|
49,158
|
|
||
Valuation Allowance
|
(26,607
|
)
|
|
(48,348
|
)
|
||
Net deferred tax liability
(1)
|
$
|
(17,165
|
)
|
|
$
|
(26,112
|
)
|
|
Year ended May 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
(in thousands)
|
|
||||||||||
Income tax (benefit) expense at statutory tax rate of 28.6%, 35.0% and 35.0%, respectively
|
$
|
2,136
|
|
|
$
|
3,447
|
|
|
$
|
(1,139
|
)
|
Effect of graduated tax rates
|
—
|
|
|
(98
|
)
|
|
33
|
|
|||
State income taxes, net of Federal tax benefit
|
120
|
|
|
(22
|
)
|
|
(215
|
)
|
|||
Impact of Non-U.S. operations
|
(288
|
)
|
|
403
|
|
|
(162
|
)
|
|||
Research and development tax credit
|
(951
|
)
|
|
(403
|
)
|
|
(499
|
)
|
|||
Impact of tax reform
|
10,912
|
|
|
—
|
|
|
—
|
|
|||
Meals and entertainment
|
242
|
|
|
266
|
|
|
329
|
|
|||
Non-deductible interest on contingent payments
|
—
|
|
|
174
|
|
|
262
|
|
|||
Non-taxable gain on revaluation of contingent consideration liability
|
—
|
|
|
(5,576
|
)
|
|
(170
|
)
|
|||
Change in valuation allowance
|
(21,741
|
)
|
|
6,139
|
|
|
40,685
|
|
|||
Effect of elimination of stock compensation APIC pool
|
—
|
|
|
1,380
|
|
|
739
|
|
|||
IPR&D intangible write-off
|
—
|
|
|
(1,224
|
)
|
|
—
|
|
|||
Other
|
700
|
|
|
353
|
|
|
474
|
|
|||
Income tax (benefit) expense
|
$
|
(8,870
|
)
|
|
$
|
4,839
|
|
|
$
|
40,337
|
|
|
Year ended May 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
(in thousands)
|
|
||||||||||
Unrecognized tax benefits balance at June 1
|
$
|
899
|
|
|
$
|
899
|
|
|
$
|
—
|
|
Increase in gross amounts of tax positions related to prior years
|
—
|
|
|
—
|
|
|
899
|
|
|||
Decrease in gross amounts of tax positions related to prior years due to U.S. tax reform
|
(287
|
)
|
|
—
|
|
|
—
|
|
|||
Decrease due to lapse in statute of limitations
|
(148
|
)
|
|
—
|
|
|
—
|
|
|||
Unrecognized tax benefits balance at May 31
|
$
|
464
|
|
|
$
|
899
|
|
|
$
|
899
|
|
|
May 31, 2018
|
|
May 31, 2017
|
||||
(in thousands)
|
|
||||||
Payroll and related expenses
|
$
|
10,235
|
|
|
$
|
11,383
|
|
Royalties
|
1,537
|
|
|
2,885
|
|
||
Accrued severance
|
1,940
|
|
|
2,075
|
|
||
Sales and franchise taxes
|
683
|
|
|
856
|
|
||
Outside services
|
2,396
|
|
|
1,622
|
|
||
Litigation matters (Note 15)
|
12,500
|
|
|
12,500
|
|
||
Acculis recall liability
|
—
|
|
|
2,563
|
|
||
Other
|
5,135
|
|
|
4,920
|
|
||
Total
|
$
|
34,426
|
|
|
$
|
38,804
|
|
|
Shares
|
|
Weighted-
average
exercise
price
|
|
Weighted
average
remaining
contractual
life
|
|
Aggregate
intrinsic
value (in
thousands)
|
|||||
Outstanding at beginning of year - June 1, 2017
|
1,667,443
|
|
|
$
|
15.01
|
|
|
|
|
|
||
Granted
|
518,498
|
|
|
$
|
16.78
|
|
|
|
|
|
||
Exercised
|
(271,344
|
)
|
|
$
|
14.83
|
|
|
|
|
|
||
Forfeited
|
(204,184
|
)
|
|
$
|
16.24
|
|
|
|
|
|
||
Expired
|
(14,000
|
)
|
|
$
|
15.75
|
|
|
|
|
|
||
Outstanding at end of year - May 31, 2018
|
1,696,413
|
|
|
$
|
15.42
|
|
|
5.58
|
|
$
|
9,520
|
|
Options exercisable at year-end
|
652,543
|
|
|
$
|
14.41
|
|
|
3.48
|
|
$
|
4,321
|
|
Options expected to vest in future periods
|
1,043,870
|
|
|
$
|
16.05
|
|
|
6.90
|
|
$
|
5,199
|
|
|
Restricted Stock Units
|
|
Weighted Average
Grant-Date Fair Value
|
|||
Non-vested at beginning of year, June 1, 2017
|
439,297
|
|
|
$
|
15.55
|
|
Granted
|
299,392
|
|
|
$
|
16.60
|
|
Vested
|
(158,756
|
)
|
|
$
|
16.83
|
|
Canceled
|
(105,431
|
)
|
|
$
|
18.25
|
|
Non-vested at end of year, May 31, 2018
|
474,502
|
|
|
$
|
16.23
|
|
|
Performance Unit Awards
|
|
Weighted Average
Grant-Date Fair Value
|
|||
Non-vested at beginning of year, June 1, 2017
|
361,164
|
|
|
$
|
18.54
|
|
Granted
|
135,135
|
|
|
$
|
23.83
|
|
Vested
|
—
|
|
|
$
|
—
|
|
Canceled
|
(44,443
|
)
|
|
$
|
22.76
|
|
Non-vested at end of year, May 31, 2018
|
451,856
|
|
|
$
|
19.75
|
|
|
|
Year ended May 31,
|
||||||||||
(in thousands)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cost of sales
|
|
$
|
119
|
|
|
$
|
299
|
|
|
$
|
172
|
|
Research and development
|
|
554
|
|
|
314
|
|
|
349
|
|
|||
Sales and marketing
|
|
1,778
|
|
|
1,762
|
|
|
1,489
|
|
|||
General and administrative
|
|
5,461
|
|
|
4,026
|
|
|
2,291
|
|
|||
Acquisition, restructuring and other items, net
|
|
—
|
|
|
(218
|
)
|
|
(1,061
|
)
|
|||
|
|
$
|
7,912
|
|
|
$
|
6,183
|
|
|
$
|
3,240
|
|
|
Year ended May 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Basic
|
37,074,797
|
|
|
36,616,859
|
|
|
36,161,383
|
|
Effect of dilutive securities
|
464,603
|
|
|
342,391
|
|
|
—
|
|
Diluted
|
37,539,400
|
|
|
36,959,250
|
|
|
36,161,383
|
|
|
|
|
|
|
|
|||
Securities excluded as their inclusion would be anti-dilutive
|
1,077,256
|
|
|
1,058,790
|
|
|
3,277,037
|
|
(in thousands)
|
|
||
2019
|
$
|
2,234
|
|
2020
|
1,829
|
|
|
2021
|
993
|
|
|
2022
|
884
|
|
|
2023 and thereafter
|
1,668
|
|
|
|
$
|
7,608
|
|
(in thousands)
|
Total
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
2023 and thereafter
|
||||||||||||
Purchase obligations (1)
|
$
|
56,201
|
|
|
$
|
11,751
|
|
|
$
|
14,243
|
|
|
$
|
15,485
|
|
|
$
|
9,189
|
|
|
$
|
5,533
|
|
Royalties
|
45,000
|
|
|
3,000
|
|
|
3,500
|
|
|
3,500
|
|
|
3,500
|
|
|
31,500
|
|
||||||
Other
|
667
|
|
|
167
|
|
|
167
|
|
|
167
|
|
|
166
|
|
|
—
|
|
||||||
|
$
|
101,868
|
|
|
$
|
14,918
|
|
|
$
|
17,910
|
|
|
$
|
19,152
|
|
|
$
|
12,855
|
|
|
$
|
37,033
|
|
(1)
|
The non-cancelable inventory purchase obligations are not reflected on our consolidated balance sheets under accounting principles generally accepted in the United States of America.
|
|
Year ended May 31,
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales by Product Category
|
|
|
|
|
|
||||||
Peripheral Vascular
|
$
|
202,334
|
|
|
$
|
208,602
|
|
|
$
|
205,620
|
|
Vascular Access
|
92,760
|
|
|
96,481
|
|
|
99,375
|
|
|||
Oncology/Surgery
|
49,191
|
|
|
44,560
|
|
|
48,895
|
|
|||
Total
|
$
|
344,285
|
|
|
$
|
349,643
|
|
|
$
|
353,890
|
|
|
Year ended May 31,
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Net sales by Geography
|
|
|
|
|
|
||||||
United States
|
$
|
273,327
|
|
|
$
|
282,168
|
|
|
$
|
285,824
|
|
International
|
70,958
|
|
|
67,475
|
|
|
68,066
|
|
|||
Total
|
$
|
344,285
|
|
|
$
|
349,643
|
|
|
$
|
353,890
|
|
|
Year ended May 31,
|
||||||||||
(in thousands)
|
2018
|
|
2017
|
|
2016
|
||||||
Legal
|
$
|
10,067
|
|
|
$
|
19,480
|
|
|
$
|
7,487
|
|
Intangible and other asset impairment
|
—
|
|
|
5,604
|
|
|
352
|
|
|||
Restructuring
|
4,674
|
|
|
1,348
|
|
|
1,462
|
|
|||
Other
|
691
|
|
|
1,078
|
|
|
3,290
|
|
|||
Total
|
$
|
15,432
|
|
|
$
|
27,510
|
|
|
$
|
12,591
|
|
|
|
|
|
|
|
|
|
Contract
|
|
|
|
|
||||||||||||
|
|
Termination
|
|
Plant
|
|
Regulatory
|
|
Cancellation
|
|
Other
|
|
|
||||||||||||
|
|
Benefits
|
|
Consolidation
|
|
Filings
|
|
Costs
|
|
Costs
|
|
Total
|
||||||||||||
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance at May 31, 2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Charges
|
|
851
|
|
|
494
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|
1,348
|
|
||||||
Non-cash adjustments
|
|
—
|
|
|
(108
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(108
|
)
|
||||||
Cash payments
|
|
—
|
|
|
(275
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
(278
|
)
|
||||||
Balance at May 31, 2017
|
|
$
|
851
|
|
|
$
|
111
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
962
|
|
Charges
|
|
1,440
|
|
|
2,892
|
|
|
68
|
|
|
200
|
|
|
74
|
|
|
4,674
|
|
||||||
Non-cash adjustments
|
|
—
|
|
|
(276
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(276
|
)
|
||||||
Cash payments
|
|
(1,453
|
)
|
|
(2,706
|
)
|
|
(56
|
)
|
|
—
|
|
|
(74
|
)
|
|
(4,289
|
)
|
||||||
Balance at May 31, 2018
|
|
$
|
838
|
|
|
$
|
21
|
|
|
$
|
12
|
|
|
$
|
200
|
|
|
$
|
—
|
|
|
$
|
1,071
|
|
(in thousands)
|
|
Foreign currency translation gain (loss)
|
|
Unrealized gain (loss) on marketable securities
|
|
Total
|
||||||
Balance at May 31, 2016
|
|
$
|
(760
|
)
|
|
$
|
(31
|
)
|
|
$
|
(791
|
)
|
Other comprehensive income (loss) before reclassifications, net of tax
|
|
(545
|
)
|
|
12
|
|
|
(533
|
)
|
|||
Amounts reclassified from accumulated other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net other comprehensive income (loss)
|
|
$
|
(545
|
)
|
|
$
|
12
|
|
|
$
|
(533
|
)
|
Balance at May 31, 2017
|
|
$
|
(1,305
|
)
|
|
$
|
(19
|
)
|
|
$
|
(1,324
|
)
|
Other comprehensive income before reclassifications, net of tax
|
|
270
|
|
|
102
|
|
|
372
|
|
|||
Amounts reclassified from accumulated other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net other comprehensive income
|
|
$
|
270
|
|
|
$
|
102
|
|
|
$
|
372
|
|
Balance at May 31, 2018
|
|
$
|
(1,035
|
)
|
|
$
|
83
|
|
|
$
|
(952
|
)
|
|
|
|
|
|
|
|
|
2018
|
||||||||||||||
|
First
quarter
|
|
Second
quarter
|
|
Third
quarter
|
|
Fourth
quarter
|
||||||||
(in thousands, except per share data)
|
|
||||||||||||||
Net sales
|
$
|
85,411
|
|
|
$
|
86,706
|
|
|
$
|
83,851
|
|
|
$
|
88,317
|
|
Gross profit
|
41,229
|
|
|
42,731
|
|
|
45,448
|
|
|
47,467
|
|
||||
Net income (loss)
(1)
|
(35
|
)
|
|
249
|
|
|
14,019
|
|
|
2,102
|
|
||||
Earnings (loss) per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
0.00
|
|
|
0.01
|
|
|
0.38
|
|
|
0.06
|
|
||||
Diluted
|
0.00
|
|
|
0.01
|
|
|
0.37
|
|
|
0.06
|
|
|
2017
|
||||||||||||||
|
First
quarter
|
|
Second
quarter
|
|
Third
quarter
|
|
Fourth
quarter
|
||||||||
(in thousands, except per share data)
|
|
||||||||||||||
Net sales
|
$
|
88,098
|
|
|
$
|
89,029
|
|
|
$
|
85,602
|
|
|
$
|
86,914
|
|
Gross profit
|
45,032
|
|
|
45,010
|
|
|
43,792
|
|
|
42,335
|
|
||||
Net income (loss)
(2)
|
1,300
|
|
|
13,734
|
|
|
2,887
|
|
|
(12,913
|
)
|
||||
Earnings (loss) per common share
|
|
|
|
|
|
|
|
||||||||
Basic
|
0.04
|
|
|
0.37
|
|
|
0.08
|
|
|
(0.35
|
)
|
||||
Diluted
|
0.04
|
|
|
0.37
|
|
|
0.08
|
|
|
(0.35
|
)
|
|
SCHEDULE II -VALUATION AND QUALIFYING ACCOUNTS
|
||||||||||||||
|
(in thousands)
|
||||||||||||||
Column A
|
Column B
|
|
Column C
|
|
Column D
|
|
Column E
|
||||||||
Description
|
Balance at
Beginning
of Year
|
|
Additions -
Charged to
costs and
expenses
|
|
Deductions
|
|
Balance at
End of Period
|
||||||||
Year Ended May 31, 2016
|
|
|
|
|
|
|
|
||||||||
Allowance for deferred tax asset
|
$
|
1,791
|
|
|
$
|
40,685
|
|
|
$
|
(267
|
)
|
|
$
|
42,209
|
|
Allowance for sales returns and doubtful accounts
|
$
|
3,043
|
|
|
$
|
3,748
|
|
|
$
|
(2,419
|
)
|
|
$
|
4,372
|
|
Year Ended May 31, 2017
|
|
|
|
|
|
|
|
||||||||
Allowance for deferred tax asset
|
$
|
42,209
|
|
|
$
|
6,139
|
|
|
$
|
—
|
|
|
$
|
48,348
|
|
Allowance for sales returns and doubtful accounts
|
$
|
4,372
|
|
|
$
|
(291
|
)
|
|
$
|
(1,136
|
)
|
|
$
|
2,945
|
|
Year Ended May 31, 2018
|
|
|
|
|
|
|
|
||||||||
Allowance for deferred tax asset
|
$
|
48,348
|
|
|
$
|
—
|
|
|
$
|
(21,741
|
)
|
|
$
|
26,607
|
|
Allowance for sales returns and doubtful accounts
|
$
|
2,945
|
|
|
$
|
608
|
|
|
$
|
(1,087
|
)
|
|
$
|
2,466
|
|
|
|
Incorporated by Reference
|
||
Exhibit Number
|
Description of Exhibits
|
Form
|
Exhibit
|
Filing Date
|
2.1
|
Stockholders Agreement, dated as of May 22, 2012, among AngioDynamics, Inc. and the stockholders set forth on the signature pages thereto.
|
8-K
|
2.2
|
May 25, 2012
|
2.2
|
Stock Purchase Agreement, dated as of October 8, 2012, by and among AngioDynamics, Inc., Vortex Medical, Inc. (“Vortex”), the stockholders of Vortex set forth on the signature pages thereto, the option holders of Vortex set forth on the signature pages thereto and CHTP Management Services, Inc., as sellers’ representative.
|
8-K
|
2.1
|
October 12, 2012
|
3.1.1
|
Amended and Restated Certificate of Incorporation.
|
10-Q
|
3.1
|
October 7, 2005
|
3.1.2
|
Certificate of Amendment to the Amended and Restated Certificate of Incorporation of AngioDynamics, Inc.
|
10-K
|
3.1.2
|
August 10, 2015
|
3.2
|
Second Amended and Restated By-Laws, effective October 16, 2015.
|
8-K
|
10.1
|
October 21, 2015
|
10.1
|
Credit Agreement, dated as of November 7, 2016, by and among AngioDynamics, Inc., the lenders party thereto, JPMorgan Chase Bank, N.A., as administrative agent, Bank of America, N.A. and Keybank National Association as co-syndication agents, and JPMorgan Chase Bank, N.A., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Keybank National Association as joint bookrunners and joint lead arrangers.
|
8-K
|
10.1
|
November 10, 2016
|
10.1.1
|
|
|
|
|
10.1.2
|
AngioDynamics, Inc. 1997 Stock Option Plan, as amended by the Board and Shareholders on February 27, 2004.
|
S-1
|
10.2
|
March 5, 2004
|
10.1.3
|
AngioDynamics, Inc. 2004 Stock and Incentive Award Plan (as amended).
|
DEF14A
|
|
September 15, 2016
|
10.1.4
|
AngioDynamics 2014 Total Shareholder Return Performance Unit Agreement Program.
|
10-K/A
|
10.1.4
|
January 12, 2015
|
10.1.5
|
AngioDynamics 2015 Total Shareholder Return Performance Unit Agreement Program.
|
10-K
|
10.1.5
|
August 10, 2015
|
10.1.6
|
AngioDynamics 2016 Total Shareholder Return Performance Unit Agreement Program.
|
10-K
|
10.1.6
|
August 1, 2016
|
10.1.7
|
|
|
|
|
10.2
|
AngioDynamics, Inc. Employee Stock Purchase Plan (as amended).
|
DEF14A
|
|
September 15, 2016
|
10.3
|
Form of Non-Statutory Stock Option Agreement pursuant to the AngioDynamics, Inc. Stock and Incentive Award Plan.
|
10-Q
|
10.1
|
October 12, 2004
|
10.3.1
|
|
|
|
|
10.4.2
|
Form of 2014 Performance Share Award Agreement pursuant to the AngioDynamics, Inc. 2004 Stock and Incentive Award Plan.
|
10-K/A
|
10.4.2
|
January 12, 2015
|
10.4.3
|
Form of 2015 Performance Share Award Agreement pursuant to the AngioDyanmics, Inc. 2004 Stock and Incentive Award Plan.
|
10-K
|
10.4.3
|
August 10, 2015
|
10.4.4
|
Form of 2016 Performance Share Award Agreement pursuant to the AngioDyanmics, Inc. 2004 Stock and Incentive Award Plan.
|
10-K
|
10.4.3
|
August 1, 2016
|
10.4.5
|
|
|
|
101.PRE
|
XBRL Presentation Linkbase Documents
|
|
|
|
ANGIODYNAMICS, INC.
|
||
Date:
|
|
July 23, 2018
|
By:
|
|
/
S
/ H
OWARD
W. D
ONNELLY
|
|
|
|
|
|
Howard W. Donnelly,
Chairman of the Board, Director
|
Date:
|
|
July 23, 2018
|
/
S
/ H
OWARD
W. D
ONNELLY
|
|
|
|
Howard W. Donnelly,
|
|
|
|
Chairman of the Board, Director
|
|
|
|
|
Date:
|
|
July 23, 2018
|
/
S
/ JAMES C. CLEMMER
|
|
|
|
James C. Clemmer,
|
|
|
|
President, Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
Date:
|
|
July 23, 2018
|
/
S
/ MICHAEL C. GREINER
|
|
|
|
Michael C. Greiner
|
|
|
|
Executive Vice President, Chief Financial Officer, (Principal Financial and Accounting Officer)
|
|
|
|
|
Date:
|
|
July 23, 2018
|
/
S
/ W
ESLEY
E. J
OHNSON
, J
R
.
|
|
|
|
Wesley E. Johnson, Jr.,
|
|
|
|
Director
|
|
|
|
|
Date:
|
|
July 23, 2018
|
/
S
/ J
EFFREY
G. G
OLD
|
|
|
|
Jeffrey G. Gold,
|
|
|
|
Director
|
|
|
|
|
Date:
|
|
July 23, 2018
|
/
S
/ D
ENNIS
S. M
ETENY
|
|
|
|
Dennis S. Meteny,
|
|
|
|
Director
|
|
|
|
|
Date:
|
|
July 23, 2018
|
/
S
/ S
TEVEN R.
L
A
P
ORTE
|
|
|
|
Steven R. LaPorte,
|
|
|
|
Director
|
|
|
|
|
Date:
|
|
July 23, 2018
|
/
S
/ K
EVIN
J. G
OULD
|
|
|
|
Kevin J. Gould,
|
|
|
|
Director
|
|
|
|
|
Date:
|
|
July 23, 2018
|
/
S
/ JAN REED
|
|
|
|
Jan Reed,
|
|
|
|
Director
|
|
|
|
|
Date:
|
|
July 23, 2018
|
/
S
/ EILEEN AUEN
|
|
|
|
Eileen Auen,
|
|
|
|
Director
|
III.
|
Performance Share Units
|
TSR Performance
Percentile Rank
|
Performance Share Units
as a Percent of Target
|
75th Percentile or above
|
200%
|
50th Percentile
|
100%
|
25th Percentile
|
50%
|
Below 25th Percentile
|
0%
|
IV.
|
Calculation of Total Shareholder Return and Definitions
|
V.
|
Calculation of Percentile Performance
|
|
|
VI.
|
Peer Group
|
|
|
VII.
|
Payment Eligibility Criteria
|
|
|
VIII.
|
Termination, Suspension or Modification and Interpretation of the Program
|
Abaxis Inc.
|
Integra Lifesciences Holdings Corporation
|
Abiomed Inc.
|
Intricon Corporation
|
Accuray Inc.
|
Intuitive Surgical, Inc.
|
AlphaTec Holdings Inc.
|
Invacare Corporation
|
Articure, Inc.
|
Lakeland Industries Inc.
|
Atrion Corporation
|
Lemaitre Vascular, Inc.
|
Becton, Dickinson & Company
|
Masimo Corporation
|
Boston Scientific Corporation
|
Merit Medical Systems, Inc.
|
Cantel Medical Corp.
|
Mine Safety Appliances Company
|
Conmed Corporation
|
Natus Medical Incorporated
|
CryoLife, Inc.
|
NuVasive, Inc.
|
Cutera, Inc.
|
NxStage Medical, Inc.
|
Dexcom, Inc.
|
Resmed Inc.
|
Digirad Corp
|
RTI Surgical, Inc.
|
Edwards Lifesciences Corporation
|
Steris Corporation
|
Endologix, Inc.
|
Stryker Corporation
|
Haemonetics Corporation
|
Teleflex Incorporated
|
ICU Medical, Inc.
|
Varian Medical Systems, Inc.
|
Insulet Corporation
|
Wright Medical
|
1.
|
The Company hereby grants to Optionee a Non‑Statutory Stock Option to purchase
______
shares (the “Shares”) of Common Stock pursuant and subject to the terms of the Plan, a copy of which has been delivered to Optionee and which is incorporated herein by reference.
|
3.
|
The Option shall expire ten years from the grant date unless earlier terminated.
|
4.
|
In the event Optionee becomes employed by, associated in any way with, or the beneficial owner of more than 1% of the equity of any business which competes, directly or indirectly, with the Company's business in any geographical area where the Company then does business, the Option shall immediately expire and Optionee shall have no rights hereunder.
|
5.
|
Except as provided hereinafter and in the Plan, the Option shall become exercisable as to the Shares covered hereby, at a cumulative rate of
25%
on each of the first
four
anniversaries of
________
provided that the Optionee has remained in the continuous employ of the Company from the date of this Agreement. Upon approval by the Compensation Committee of the Board of Directors of the Company, for purposes of this Agreement, service as a consultant or director of the Company shall be deemed to be employment by the Company.
|
6.
|
The Option shall not be transferable otherwise than by will or by the laws of descent and distribution and during the lifetime of Optionee shall be exercisable only by Optionee.
|
7.
|
In the event Optionee ceases to be employed by the Company for any reason other than death or disability, the Option may be exercised (if it has not expired under Sections 3 or 4 and is exercisable under Section 5), to the extent the Optionee is entitled to do so on the date of termination, only during the period ending three months from the date of such cessation.
|
8.
|
In the event Optionee ceases to be employed by the Company by reason of death or disability, the Option may be fully exercised as to all Shares covered hereby (if it has not expired under Sections 3 or 4 but regardless of whether it is exercisable under Section 5) only during the period ending one year from the date of such cessation.
|
9.
|
Nothing herein or in the Plan shall confer upon any employee of the Company any right to continue in the employment of the Company.
|
10.
|
The Option and the Plan are subject to adjustments, modifications and amendments as provided in the Plan.
|
11.
|
Subject to the Plan, this Agreement shall bind and inure to the benefit of the Company, Optionee and their respective successors, permitted assigns and personal representatives.
|
12.
|
This Agreement will be governed by and construed under the laws of Delaware.
|
13.
|
Any disputes, claims or interpretive issues arising hereunder shall be resolved by the Committee in its sole and absolute discretion, and the Committee's determinations shall be final and incontestable.
|
|
|
|
I.
|
Company Performance Levels
|
TSR Performance
Percentile Rank
|
Performance Share Units
as a Percent of Target
|
75th Percentile or above
|
200%
|
50th Percentile
|
100%
|
25th Percentile
|
50%
|
Below 25th Percentile
|
0%
|
II.
|
The Peer Group (as defined in the Program) with respect to this Agreement is set forth below.
|
Abaxis Inc.
|
Integra Lifesciences Holdings Corporation
|
Abiomed Inc.
|
Intricon Corporation
|
Accuray Inc.
|
Intuitive Surgical, Inc.
|
AlphaTec Holdings Inc.
|
Invacare Corporation
|
Articure, Inc.
|
Lakeland Industries Inc.
|
Atrion Corporation
|
Lemaitre Vascular, Inc.
|
Becton, Dickinson & Company
|
Masimo Corporation
|
Boston Scientific Corporation
|
Merit Medical Systems, Inc.
|
Cantel Medical Corp.
|
Mine Safety Appliances Company
|
Conmed Corporation
|
Natus Medical Incorporated
|
CryoLife, Inc.
|
NuVasive, Inc.
|
Cutera, Inc.
|
NxStage Medical, Inc.
|
Dexcom, Inc.
|
Resmed Inc.
|
Digirad Corp
|
RTI Surgical, Inc.
|
Edwards Lifesciences Corporation
|
Steris Corporation
|
Endologix, Inc.
|
Stryker Corporation
|
Haemonetics Corporation
|
Teleflex Incorporated
|
ICU Medical, Inc.
|
Varian Medical Systems, Inc.
|
Insulet Corporation
|
Wright Medical
|
|
|
|
Subsidiary
|
|
State of Incorporation or Organization
|
Vortex Medical
|
|
Delaware
|
NM Holding Company, Inc.
|
|
Delaware
|
Navilyst Medical Holdings, Inc.
|
|
Delaware
|
Navilyst Medical, Inc.
|
|
Delaware
|
AngioDynamics UK Limited
|
|
United Kingdom
|
AngioDynamics Netherlands B. V.
|
|
Netherlands
|
RITA Medical Systems, LLC
|
|
Delaware
|
AngioDynamics France, SARL
|
|
France
|
AngioDynamics Canada Inc.
|
|
British Columbia
|
1.
|
I have reviewed this annual report on Form 10-K of AngioDynamics, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/ S / JAMES C. CLEMMER
|
James C. Clemmer, President,
|
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of AngioDynamics, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/ S / MICHAEL C. GREINER
|
Michael C. Greiner, Executive Vice President,
|
Chief Financial Officer
|
1.
|
the annual report on Form 10-K of the Company for the fiscal year ended May 31, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ James C. Clemmer
|
James C. Clemmer, President,
|
Chief Executive Officer
|
1.
|
the annual report on Form 10-K of the Company for the fiscal year ended May 31, 2018 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Michael C. Greiner
|
Michael C. Greiner, Executive Vice President,
|
Chief Financial Officer
|